• 07
  • June
    2011

Most asset protection discussions involving married couples revolve around sophisticated matters such as investment strategies for retirement accounts or ways to protect a business in the event of a divorce.

In general, most of these discussions involve couples that have accumulated sizeable assets over the years and/or have been married for a rather lengthy period of time.

Interestingly, far younger couples - between the ages of 18 to 22 - are now holding their own asset protection discussions. However, the discussion is not about how to maximize investments or safeguard assets, but rather as to whether they should get married to reduce their debt levels.

Confused?

According to recent reports, more and more college students are entering into short-term marriages to take advantage of favorable financial aid packages.

To illustrate, an 18-year old headed off to college in the fall is likely to pay upwards of $20,000 a year in tuition, room and board, etc. However, if his or her parents make around $70,000 a year, the prospective student is likely to receive only limited financial aid, relying on the prospect of having to take out thousands of dollars in unsubsidized student loans.

However, there is a loophole in the law which essentially states that eligibility for financial aid is no longer tied to the income of a student's parents if they get married.

Specifically, if young college students marry, their respective financial aid packages will not be based on their parent's income, but rather on their personal joint income.

This can translate into substantial savings over the years, as the typical young married couple in this situation probably earns somewhere between $10,000 to $15,000 a year, putting them at or below the poverty line and in a prime position for generous financial aid.

Once college is complete, many of these so-called married couples - who likely never even lived together - simply secure a divorce.

Legal experts are understandably wary of such arrangements and frequently urge young people to tread very cautiously.

It remains to be seen how the federal government will respond to this growing trend ...

If you would like to learn more about divorce, property division or asset protection, you should strongly consider speaking with an experienced legal professional.

This post is provided for informational purposes only and is not to be construed as legal or financial advice.

Stay tuned for more from our Denver divorce blog ...

Related Resources:

Would you marry to save tuition? (MSN Money)